I had an interesting conservation today concerning manufactured homes in this market area. My office is in a small office building on courthouse square. There are three offices in this building. A real estate lawyer, a title company, and mine. Today I was standing outside taking a cigar smoke break and an old builder I have known for 30 years came by going to the lawyer’s office.
He works for a developer of lots for doublewide manufactures homes. He said the manufactured home business is nothing but a con game racket. His company has 400 lots that they sell under contract for deed. The people buy the lots on contract and then buy a doublewide home from a sales lot and finance with some finance company. He said this market was in a real mess. He had a file in his hand on the case he was working on. They sold the lot to a woman who purchased a doublewide for $110,000 and installed it on the lot. Then she never made even the first payment. His company took the lot back six months ago and the finance company won’t remove the home. They have it listed at $60,000 considering she paid $110,000 about 8 months ago. He said they are a dime a dozen.
The way this subject came up was I had an assignment two weeks ago on a doublewide that the owner claimed he had $140,000 invested in including lot and add-ons. I axed if he had ever seen a doublewide in this market sell for over $100,000. He said yea, I have this one in my hand that sold for $110,000 eight months ago, but you can buy it today for $60,000. He said repo’s are a dime a dozen. The last one I apprised was a good quality doublewide on a rental lot. It was a repo and the finance company owned it, the loan balance was $55,000 on the loan and it was under contract at $15,000. I axed him how these people were getting these things financed. He said I have no idea. I think I have seen this finance company discussed on this board before.
Two years ago this market was smoking with sales lots wall to wall a few miles from where I live. This may well be the next scandal to break. Whitewater II. I am steering clear of this mess. The appraisal I mentioned above, I just told the bank I couldn't support a price estimate because no sale data was available.